Rating agencies Moody's Investors and Standard & Poor's today said that the ratings issued to ICICI Bank's $750 million senior unsecured notes will not be affected by the bank's decision to come out with an additional issuance of $250 million.

While Mody's has assigned 'baa2' ratings assigned to the issue, S&P has assigned 'BBB-' to the issue. The outlook on the ratings remains stable.

According to the Moody's report, the ratings capture the bank's solid franchise as the second largest commercial bank in India as well as its strong capitalization, liquidity, and earnings profile. The ratings also reflect the bank's high borrower concentration in the form of its mandatory government securities portfolio, its weaker asset quality when compared to its Indian private sector peer banks and the difficult operating environment currently prevailing in India, including the intense competition it faces in its domestic markets.

The standalone bank financial strength rating of the bank issued by Moody's is 'D+' and the baseline credit assessment (BCA) issued is 'baa3' on the long-term scale.

“We believe that the probability of systemic support for ICICI Bank is very high, given its sizeable retail deposit franchise and its importance to the national payments system as India's second largest commercial bank. Therefore, the long-term local currency deposit and foreign currency senior unsecured debt ratings receive a one-notch rating uplift from its BCA,” Moody's said.
“We believe that the probability of systemic support for ICICI Bank is very high, given its sizeable retail deposit franchise and its importance to the national payments system as India's second largest commercial bank. Therefore, the long-term local currency deposit and foreign currency senior unsecured debt ratings receive a one-notch rating uplift from its BCA,” Moody's said.